Workforce Solutions Alamo settles lawsuit by ex-CEO

2of2Gail Hathaway, left, speaks to the Workforce Solutions Alamo board at the start of a board meeting in November 2016. The board fired Hathaway, who then sued the organization for breach of contract. The suit was recently settled.Photo: Staff file photo

Workforce Solutions Alamo has settled a lawsuit filed by former CEO and executive director Gail Hathaway, who was fired by the agency’s board in 2016.

The parties confirmed the dispute has been settled but terms have not been made public. Hathaway, 55, had sued the organization for up to $1 million for breach of contract, slander and emotional distress about six months after her termination. She also sought unspecified punitive damages.

“I’m sorry, I just can’t give you a comment on it,” Hathaway said when asked about the settlement Thursday. She said terms of the settlement prevented her from speaking about it.

Frank Burney, a lawyer for the Workforce Solutions Alamo board, said it had no comment on the settlement. The organization, which serves a 13-county area, helps job seekers find employment.

The San Antonio Express-News submitted to the organization a public records request asking for a copy of the settlement, but it did not immediately respond.

Workforce Solutions Alamo hired Hathaway to head the organization in 2014, paying her an annual salary of $151,000. She was fired in November 2016 following a scathing report from the Texas Workforce Commission that criticized the organization’s contracting practices and cited a “culture of fear, suspicion and retaliation” among staff. The state agency oversees Workforce Solutions Alamo.

The state agency, which supervises the local organization, also found “discrepancies in procurement procedures and allegations of a hostile workplace environment,” the Express-News reported at the time. Before her firing, Hathaway told the board she was “made out to be the bad guy and scapegoat.”

In April 2017, Hathaway sued Workforce Solutions Alamo in Bexar County District Court. The suit was removed to San Antonio federal court a few months later.

Hathaway assigned most of the blame for her firing on Eva Esquivel, the organization’s then-director of communications, who was later added to the suit as a defendant. The lawsuit alleged Esquivel spread rumors about Hathaway that she knew to be untrue

Hathaway alleged she was the victim of “employment harassment” by Esquivel, who “resented being subordinate to a white executive director,” according to the amended complaint. Esquivel also made false allegations to spark a Texas Workforce Commission investigation that would harass Hathaway and lead to her termination, the lawsuit added.